17 Fla. L. Weekly Supp. 1234a
Online Reference: FLWSUPP 1712DOUGInsurance — Personal injury protection — Attorney’s fees — Confession of judgment — Where insurer defended lawsuit and only paid claim after case was dismissed, insurer’s payment of claim was not functional equivalent of confession of judgment — Further, where payment of claim was made within 15 days of receipt of demand letter served after dismissal of suit, medical provider cannot bring suit against insurer, and insurer cannot be held liable for attorney’s fees
DIONNE DOUGLAS, and SANAR HEALTH SERVICE, INC., D/B/A MEDICAL REHABILITATIVE CENTER, Plaintiffs, vs. UNITED AUTOMOBILE INSURANCE CO., Defendant. County Court, 11th Judicial Circuit in and for Miami-Dade County. Case No. 06-4114 CC 05 (06). June 15, 2010. Bronwyn C. Miller, Judge. Counsel: Michael J. Feldman. Johane Altenor.
ORDER DENYING PLAINTIFFS’ MOTION FOR ENTITLEMENT TO ATTORNEY’S FEES
THIS CAUSE, having come before the Court on June 14, 2010 upon Plaintiffs’ Motion for Entitlement to Attorney’s Fees and the Court having reviewed the procedural history, and all applicable legal authority, the Court hereby ORDERS and ADJUDGES as follows:
Facts:
1. On December 1, 2004, Plaintiff DIONNE DOUGLAS was involved in an automobile accident in Miami-Dade County. At the time of the accident, Douglas was traveling in an automobile insured by Defendant UNITED AUTOMOBILE INSURANCE COMPANY. After the accident, DOUGLAS sought treatment for injuries she sustained at SANAR HEALTH SERVICE, INC. D/B/A MEDICAL REHABILITATIVE CENTER.
2. DOUGLAS sought payment of personal injury protection (“PIP”) benefits from United in conjunction with her treatment. UNITED AUTO denied payment. DOUGLAS did not execute an assignment of benefits, thus she retained her right to sue UNITED AUTO, directly.
3. DOUGLAS served UNITED AUTO with a pre-suit demand letter pursuant to section 627.736(11), Florida Statutes. UNITED AUTO failed to render payment within the “safe harbor” period, and DOUGLAS filed suit on April 16, 2006.
4. The case was heavily litigated for several years. During the course of the litigation, counsel for UNITED AUTO scheduled DOUGLAS for deposition on numerous occasions. DOUGLAS never appeared, notwithstanding proper notice. The Court entered two separate orders compelling the attendance of DOUGLAS at deposition. Again, DOUGLAS failed to appear. Thereafter, UNITED AUTO filed a Motion to Strike Plaintiff’s Pleadings.
5. The Court entertained the Motion to Strike Plaintiff’s Pleadings on April 22, 2008. At that time, counsel for Plaintiff indicated that he had lost contact with his client and did not know her whereabouts. The Court extended Plaintiff’s counsel an additional ninety (90) days to locate DOUGLAS. Plaintiffs counsel also informed both the Court and opposing counsel that he had filed a Motion to Amend the Complaint seeking to add SANAR as a Plaintiff in the case. The Motion to Amend was not scheduled for hearing on April 22, 2008, thus, no order was entered at that time regarding the proposed amended complaint.1
6. DOUGLAS did not appear for deposition within ninety (90) days, as required by the April 22, 2008 court order. Plaintiff’s counsel scheduled his Motion to Amend for hearing on September 9, 2008.
7. On September 9, 2008, counsel of record for UNITED AUTO did not appear. However, another in-house attorney for UNITED AUTO appeared in court on an unrelated matter, thus was present during the hearing. The Court granted the Motion to Amend. Thereafter, counsel for UNITED AUTO filed Defendant’s Emergency Motion to Vacate Order dated September 9, 2008 on Plaintiff’s Motion to Amend the Complaint and Motion for Sanctions. Counsel for UNITED AUTO alleged she had not received notice of the hearing on the Motion to Amend. No order on Defendant’s motion appears on the docket. UNITED AUTO further filed its Answer and Affirmative Defenses alleging, in relevant part, that SANAR lacked standing, as DOUGLAS had not executed an assignment of benefits.
8. Thereafter, Defendant filed a Motion for Summary Judgment on the Issue of Plaintiff’s Lack of Standing and Motion to Strike. The motions proceeded to hearing on November 24, 2009. At that time, the Court entered an order dismissing the case in order for SANAR to perfect its standing to sue and serve UNITED AUTO with a demand letter from SANAR.2
9. On December 1, 2009, SANAR served UNITED AUTO with a pre-suit demand for the bills related to treatment rendered to DOUGLAS. UNITED AUTO paid the entire amount sought on December 16, 2009.
10. On January 19, 2010, Plaintiff’s counsel filed Plaintiff’s Counsel’s Verified Motion on Fees and Costs. On January 28, 2010, Plaintiff’s counsel filed Plaintiff’s Motion for Clarification
Conclusions of Law:
Issues:
Plaintiff’s counsel seeks attorney’s fees in conjunction with his prosecution of the case on behalf of both Plaintiffs.
Plaintiffs contend that the Court erred in dismissing the case. Plaintiffs further assert that UNITED AUTO’s action in paying the claim pursuant to the pre-suit demand letter amounted to a confession of judgment, thus fee entitlement exists by operation of statute.
Jurisdiction:
On November 24, 2009, the Court dismissed DOUGLAS’s case for failing to comply with court orders and SANAR’s case for lack of standing and failure to comply with conditions precedent. Plaintiffs contend that the Court erred, however, to date have not filed a motion for rehearing. Moreover, Plaintiffs did not file an appeal of the dismissal order.
Thus, the Court is without jurisdiction to reconsider its prior orders. See, Rule 1.530 Fla. R. Civ. P. (Motion for rehearing must be served no later than ten days after entry of final order). Nonetheless, the Court addresses the merits of Plaintiffs’ contentions.
Standing:
DOUGLAS originally filed suit against UNITED AUTO. After the case was in litigation, she terminated contact with counsel and failed to comply with court orders requiring her attendance at deposition. Thus, the Court dismissed her action pursuant to Rule 1.380 Fla. R. Civ. P.
Prior to the Court dismissing the case against DOUGLAS, her counsel added SANAR as a Plaintiff. SANAR did not have an executed assignment of benefits.
“At any one time, only the insured or the medical provider ‘owns’ the cause of action against the insurer for PIP benefits.” Progressive Exp. Ins. Co. v. McGrath Community Chiropractic, 913 So. 2d 1281, 1285 (Fla. 2d DCA 2005) [30 Fla. L. Weekly D2622b], citing Oglesby v. State Farm Mut. Auto. Ins. Co., 781 So.2d 469, 470 (Fla. 5th DCA 2001) [26 Fla. L. Weekly D702a] (“For a medical provider to bring an action for PIP benefits, the insured must assign his or her right to such benefits under the policy to the medical provider.”). Id. In the case sub judice, DIONNE DOUGLAS never executed an assignment of benefits in favor of SANAR. Thus, SANAR lacked standing to maintain suit against UNITED AUTO.
Plaintiffs’ counsel asserts the position that SANAR holds an equitable assignment to DOUGLAS’s benefits. However, legal authority binding upon this Court has determined that this assertion is frivolous. See, Ins. Corp. of New York v. M & J Health Center, Inc., 13 Fla. L. Weekly Supp. 682a (11th Jud. Cir. App., April 4, 2006) (Trial court abused its discretion in failing to award fees pursuant to section 57.105, Florida Statutes, because an equitable assignment is specifically prohibited in personal injury protection claims).
Entitlement to Fees:
Pursuant to section 627.428, Florida Statutes, upon rendition of a judgment against an insurer and in favor of an insured or beneficiary under a policy, the court shall determine a reasonable sum as attorney fees. See, also section 627.736(8), Florida Statutes; Palmer v. Fortune Ins. Co., 776 So. 2d 1019 (Fla. 5th DCA 2001) [26 Fla. L. Weekly D278a]. Plaintiffs contend that the tender of payment by UNITED AUTO following service of the pre-suit demand amounted to a confession of judgment.
Although Florida jurisprudence has recognized that when an insurer declines to defend a pending lawsuit and pays a disputed claim, said payment is the functional equivalent of a judgment in favor of the insured, in the instant case, the insurer paid the claim after the case was dismissed. Thus, Plaintiffs’ claim is not supported by law. See, United Auto. Ins. Co. v. Ubeda, 17 Fla. L. Weekly Supp. 327a (11th Jud. Cir. App. 2010) (Premature demand letter requires dismissal or abatement); Wollard v. Lloyd’s and Companies of Lloyd’s, 439 So.2d 217 (Fla. 1983) (Where an insurer has rendered payment in a pending case, the payment of the claim is the functional equivalent of a confession of judgment in favor of the insured, and therefore the settlement between the insured and insurer provides the basis for an award of attorney fees to the insured); Palmer v. Fortune, 776 So. 2d at 1021 (Right to attorney’s fees inures to the insured upon payment during a pending suit by the insurer). In the instant case, the Court dismissed the case in November, 2009. UNITED AUTO rendered payment on December 16, 2009. Thus, UNITED AUTO did not decline to defend its position in a pending lawsuit and its payment pursuant to a pre-suit demand served by SANAR did not amount to a confession of judgment.
Safe Harbor Provision of sec. 627.736(11), Florida Statutes (2003):
Finally, UNITED AUTO availed itself of the “safe harbor” provision of section 627.736(10)(a), thus, is not subject to the imposition of fees and costs. SANAR had a statutory obligation to submit a demand letter to UNITED AUTO prior to initiating litigation. Section 627.736(11), Florida Statutes (2003) states:
If, within 15 days after receipt of notice by the insurer, the overdue claim specified in the notice is paid by the insurer together with applicable interest and a penalty of 10 percent of the overdue amount paid by the insurer, subject to a maximum penalty of $250, no action may be brought against the insurer. (emphasis supplied).
In the instant case, the pre-suit demand was placed in the mail to UNITED AUTO on December 1, 2009. UNITED AUTO paid the requested sum on December 16, 2009. Thus, UNITED AUTO paid the claim within fifteen (15) days of receipt of receipt of SANAR’s pre-suit notice. Pursuant to Florida law, SANAR was precluded from bringing action against UNITED AUTO, thus, UNITED AUTO cannot be held liable for attorney’s fees.
WHEREFORE, Plaintiffs’ Motion for Entitlement to Attorney’s Fees is hereby DENIED.
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1It should be noted that Defendant expressed objection to the proposed amendment at the hearing on the Motion to Strike Plaintiffs Pleadings and filed its Response to Plaintiff’s Motion to Amend Complaint on April 15, 2008. Defendant’s Response to Plaintiff’s Motion to Amend Complaint alleges, in material part, that SANAR lacked an executed assignment of benefits, thus, was not vested with standing to sue UNITED AUTO for PIP benefits due and owing to DOUGLAS.
2SANAR did not serve UNITED AUTO with a pre-suit demand prior to entering the case.
